We recently published a list of 10 Most Oversold Semiconductor Stocks in 2024. In this article, we are going to take a look at where Axcelis Technologies, Inc. (NASDAQ:ACLS) stands against other most oversold semiconductor stocks in 2024.

The semiconductor industry is a crucial pillar of global technological development, providing essential components for various industries, from consumer electronics to industrial automation. Despite its long-term growth potential and innovation, several semiconductor companies underperformed significantly in 2024. These companies were impacted by internal and external factors such as geopolitical tensions and changing regulatory landscapes. For 2024, even the broader Philadelphia Semiconductor Index (SOX), which tracks the performance of the largest U.S.-traded semiconductor companies, returned 19.2%, lagging behind the S&P 500 Index’s 23% return.

In a mid-2024 CNBC interview, Stacey Rasgon, Managing Director at Bernstein Research, highlighted that U.S. semiconductor companies are at a disadvantage due to these restrictions, potentially limiting their growth and competitiveness in the global market. He also attributed uncertainties in Taiwanese businesses to comments from Mr. Trump, the then-presidential candidate, regarding Taiwan.

Certain sectors within the semiconductor industry also faced weaker-than-expected demand in 2024, particularly in consumer electronics and traditional automotive sectors. Despite strong growth prospects in AI, data centers, and automotive technologies, companies more exposed to legacy industries experienced slower demand, leading to weaker earnings. Deloitte’s 2025 global semiconductor industry outlook described this as a “tale of two markets”: companies in the generative AI chip market outperformed, while those without exposure (such as automotive, computer, smartphone, and communications semiconductor companies) underperformed.

While the long-term outlook for the semiconductor sector remains positive, short-term volatility and external challenges are creating headwinds for many companies. Companies most exposed to geopolitical tensions, regulatory shifts, and supply chain issues are likely to experience continued underperformance.

Our Methodology

To determine the 10 most oversold semiconductor stocks in 2024, we began by shortlisting all U.S.-listed semiconductor companies with a current market price of over $10 to avoid penny stocks. From these stocks we filtered the stocks which posted negative returns in 2024. We then ranked the bottom 10 companies in descending order based on their 2024 performance. Additionally, we included data on hedge fund holdings in these companies as of Q4 2024 to provide further insight into investor interest.

Note: All pricing data is as of market close on February 19.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Axcelis Technologies, Inc. (NASDAQ:ACLS)

Share price return in 2024: -44%

Number of Hedge Fund Holders: 27

Axcelis Technologies, Inc. (NASDAQ:ACLS) specializes in designing, manufacturing, and servicing ion implantation systems used in semiconductor chip fabrication.

With the semiconductor industry’s ongoing transition towards advanced node fabrication and the rising demand for cutting-edge chips, Axcelis Technologies, Inc. (NASDAQ:ACLS) is poised to benefit from increased investment in semiconductor manufacturing. The company’s leadership in providing innovative equipment for the industry’s most advanced chips, especially in high-growth sectors like artificial intelligence, 5G, and automotive, positions it well for future growth.

However, in 2024, the semiconductor industry faced a weaker phase due to customer inventory indigestion, which also affected Axcelis Technologies, Inc. (NASDAQ:ACLS) as a supplier. While the stock performed well in the first half of 2024, it consistently declined in the second half, losing 44% of its value over the full year.

The stock continued to weaken, declining by around 9% in 2025 as well. The company recently projected that new interim final rules from the U.S. Department of Commerce Bureau of Industry and Security (BIS) regarding semiconductor equipment exports to China could potentially reduce its total annual revenue by $20 million to $50 million in 2025. Despite this near-term headwind, Axcelis Technologies (NASDAQ:ACLS) has robust growth drivers to support its long-term trajectory.

Overall, ACLS ranks 3rd on our list of most oversold semiconductor stocks in 2024. While we acknowledge the potential of ACLS to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ACLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.